MANILA, (PNA) – As the country’s offshore trade performance grew in July 2013, trade deficit also went up by 75.6 percent to US$ 649.07 million from June 2013 US$ 369.60 million.
According to the latest accounts of the National Statistics Office (NSO), external trade performance in July posted at US$ 10.322 billion versus June’s US$ 9.35 billion, an increase of 10.39 percent.
This is contributed by exports revenue of US$ 4.836 billion and imports payment of US$ 5.486 billion both in July of this year.
Thus, the Philippines registered a deficit of US$ 649.07 million for July of this year.
”High trade deficit means more imports, which bring a rise on demand for dollars which will depreciate the value of peso,” said University of Sto. Tomas (UST) professor and economist Gary Galang in an interview.
Galang noted that the country still managed to strengthen the local currency due to increasing overseas Filipino workers (OFW) remittances and the continuous growth of the Business Process Management (BPM) industry, formerly Business Process Outsourcing (BPO).
”The unique thing why we are able to manage a strong currency now even we have a strong imports are the OFW remittances and influx of foreign BPO capital that keep us on manageable level,” he said.
OFW remittances for the month July has increased 6.6 percent compared to last year’s same period.
Also, the country has managed to maintain strong peso which is currently pegged at P43.36 versus a US dollar.
Aside from depending on OFW remittances and BPO companies, Galang challenged the exporters to intensify export activities to reduce the trade deficit.
”With this (deficit) exporters are motivated to increase their orders which will bring an increase of dollar supply and manageable strong currency,” he said.
”This could only happen if the export sector has potential industries to dampen the increase of imports,” he added. “In my study (of Philippine exports), most has strong dependency on imports especially in the electronics and garments sector.”